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History as a coordination device

Author

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  • Rossella Argenziano

    ()

  • Itzhak Gilboa

    ()

Abstract

Coordination games often have multiple equilibria. The selection of equilibrium raises the question of belief formation: how do players generate beliefs about the behavior of other players? This article takes the view that the answer lies in history, that is, in the outcomes of similar coordination games played in the past, possibly by other players. We analyze a simple model in which a large population plays a game that exhibits strategic complementarities. We assume a dynamic process that faces different populations with such games for randomly selected values of a parameter. We introduce a belief formation process that takes into account the history of similar games played in the past, not necessarily by the same population. We show that when history serves as a coordination device, the limit behavior depends on the way history unfolds, and cannot be determined from a-priori considerations. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Rossella Argenziano & Itzhak Gilboa, 2012. "History as a coordination device," Theory and Decision, Springer, vol. 73(4), pages 501-512, October.
  • Handle: RePEc:kap:theord:v:73:y:2012:i:4:p:501-512
    DOI: 10.1007/s11238-011-9264-5
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alexander Funcke, 2015. "Instilling Norms in a Turmoil of Spillovers," PPE Working Papers 0004, Philosophy, Politics and Economics, University of Pennsylvania.
    2. Steiner, Jakub & Stewart, Colin, 2008. "Contagion through learning," Theoretical Economics, Econometric Society, vol. 3(4), December.
    3. Tom Wilkening, 2009. "The Informational Properties of Institutions: An Experimental Study of Persistence in Markets with Certification," Department of Economics - Working Papers Series 1087, The University of Melbourne.
    4. Daron Acemoglu & Matthew O. Jackson, 2015. "History, Expectations, and Leadership in the Evolution of Social Norms," Review of Economic Studies, Oxford University Press, vol. 82(2), pages 423-456.
    5. Halaburda, Hanna & Jullien, Bruno & Yehezkel, Yaron, 2016. "Dynamic Competition with Network Externalities: Why History Matters," CEPR Discussion Papers 11205, C.E.P.R. Discussion Papers.
    6. Rajesh Ramachandran & Christopher Rauh, 2014. "Discrimination Without Taste - How Discrimination can Spillover and Persist," Cambridge Working Papers in Economics 1466, Faculty of Economics, University of Cambridge.
    7. Jakub Steiner & Colin Stewart, 2007. "Learning by Similarity in Coordination Problems," CERGE-EI Working Papers wp324, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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